Dalian Wanda Commercial Properties shares flat on debut
City's biggest listing this year ultimately disappoints as shares end 2.6pc below their offer price amid concerns over mainland property market
Shares in Dalian Wanda Commercial Properties, controlled by Wang Jianlin, closed in the red on their market debut yesterday amid concerns over the outlook for the mainland property sector.
The initial public offering, raising about HK$28.8 billion, was Hong Kong's biggest this year.
The stock closed 2.6 per cent below the issue price of HK$48, at HK$46.75. Soon after the market opening, it had edged up 20 HK cents above the issue price.
Aside from worries about the depressed mainland property market, analysts said investors baulked at the high-priced offering.
"Wanda was priced at the upper limit of the price range, representing a forward price-earnings ratio of 11.5 times, compared to CR Land's 8 times. It is expensive," said Edison Bian, the head of China property research at UOB Kay Hian. "Also, many funds in Hong Kong had already closed their books for 2014, thus the timing of the initial public offering came a bit late."
The share offering was much smaller than initially planned, with Wanda originally hoping to raise up to US$6 billion.
On Sunday, the company said the retail tranche of the offering was about 5.32 times subscribed. Retail investors were allotted 30 million H shares, or 5 per cent of the global offering. The remaining 570 million shares of the offering were sold to international and institutional investors. The company said its international offering to global institutional investors was moderately oversubscribed.